Double Standards and Double Talk

The writing is boldly etched on the wall and the portent is clear. If there is no prompt change of tack, the people will democratically rock the boat and upset the apple cart to set things right

The salary compensation of Rs 200 for those earning up to Rs15, 000 per month and Rs 150 for those earning between Rs15, 000 and Rs 50,000 per month granted last week does not make much difference to the finances of people, especially the multitude who are at the bottom of the salary scale.

The Government’s self congratulatory and smug claim that it represents an increase of salary of 1.5% (1.33% actually) for those earning Rs 15,000 which is higher than the rate of inflation of 1% established by Statistics Mauritius is aeons distanced from the ground reality of hardships faced by the common man to make both ends meet. Not surprisingly, the same old pontiffs of the private sector have rehashed the same old arguments aired for donkey’s years about the absolute necessity to tie productivity to any compensation paid to the work force.

According to the Minister of Finance the compensation which will cost Rs 1.9 billion will benefit a total of 500,000 employees earning up to Rs 50,000. 325,000 of these earn up to Rs 15,000. Rs 200 is hardly going to bring any relief to their hardships against the backdrop of rising prices, income erosion and the information shared by government that the current cost of the standard basket of goods purchased by the housewife is Rs 26,200. As a consequence, there is obviously a pervasive feeling among the people of being short changed and bamboozled.

In contrast, 6 smart city promoters including three land asset rich sugar conglomerates will benefit from the lion’s share of some Rs 3.6 billion of a fiscal largesse of a whopping Rs 5.425 billion in terms of a whole range of extremely generous fiscal exemptions provided by government under the Smart City Scheme. These include exemptions from the payment of land transfer tax at the rate of Rs 3.5 million per hectare, registration duty, morcellement tax, VAT, customs duty, income tax for a period of 8 years and accelerated allowance of 50% on costs of listed items. The actual fiscal generosity towards these smart city projects and other projects in the pipeline under the Smart City Scheme should be significantly higher.

This begs the burning question of what is going to be the tangible benefits of the whole scheme from the standpoint of the people and the national interests as opposed to private interests. Shouldn’t the smart city projects be opened for public shareholding? It is therefore essential that the balance of benefits of the Smart City Scheme is established in a transparent and accountable manner to ensure that the benefits accruing to the people at large more than match the substantial fiscal generosity. Is this key measurement of public accountability on the cards or is it too hot a potato to be put under the scanner of public scrutiny?

Smart city projects which must cover an area of at least 50 acres allows the development of a multifaceted mix of residential, light industrial, educational, medical, tourism, research and high technology and innovation clusters, convention centres, shopping malls, recreational facilities, renewable energy production as well as office blocks, industrial parks, techno parks, SME parks, etc.. You name it, it is all there. The residential component which can cover up to 50% of the total land area earmarked for the project is a central element of its viability. It comprises high-end luxury villas, apartments, houses, townhouses, apartments and duplexes, up to 75% of which can be sold to non-citizens with the tag that a ‘non-citizen acquiring a residential unit above USD 500,000 (Rs 17.7 million) under the scheme is eligible to a residence permit for himself and his family’. Under specified conditions under the scheme, ‘a non-citizen having made an investment over USD 5 million (Rs 176.8 million) in Mauritius may apply for Mauritian citizenship’. Thus, despite the risks associated with any business venture, the smart city projects are potentially very lucrative cash cows.

The multiplicity of smart cities in chosen locations across the island will also significantly hike real estate values in the country and generally make them even more inaccessible to the young and mainstream Mauritius.

As a nation, we cannot progress and be sustainable both socially and economically if every citizen and household does not benefit fairly from the fruits of prosperity, see his standard of living continuously improving in real terms and inequalities being narrowed. This is far from happening in the country. Inequalities are continuously widening. Government sponsored schemes such as smart cities provide added impetus to this widening divide between the rich who are become richer and the rest who are sustaining a steady erosion of their standard of living.

Empty slogans

Inclusiveness cannot be reduced to an empty slogan. A fairer sharing of the fruits of prosperity is both a moral and a socio-economic imperative.

The government and the haves cannot remain blind to the ground realities of the country such as the jolting fact that 325,000 employees (and probably the only household bread-earner) earn up to Rs 15,000 and still find, 48 years after independence, difficulties every month to make both ends meet. This also means that an important proportion of these employees are earning less than Rs 15,000. This iniquitous situation raises the question of a minimum salary to enable large swathes of low income earners in principally the private sector to live with dignity and essential comfort against the backdrop of a constant erosion of their purchasing power.

Policy makers, the captains of industry and the private sector cannot also ignore the warnings of the World Bank in its February 2016 country report entitled Mauritius, Inclusiveness of Growth and Shared Prosperity that there is a real risk that part of the middle classes could slip into poverty. The report further advanced that ‘owing to the rise in income inequality and lagging shared prosperity indicators, the incomes of the bottom 40 percentile of the population (the lower 40% income earners) of Mauritius has deteriorated in relative terms.’

A development model which has delivered such damning results is untenable and must be scuttled forthwith. Abject policies and double standards infect all sectors from sugar to the protection of our livestock against disease or litchis against marauding bats, land policy, the energy sector or merit based employment. They have systematically widened instead of narrowed the glaring inequalities plaguing the country. This unacceptable trend needs to be urgently reversed by a more enlightened approach towards the world of employment, cogent and truly inclusive and fairer policies to narrow down inequalities.

The whole political class including the opposition parties bent on endless politicking to wrest power by all means are totally unconcerned by the existential and bread and butter preoccupations of large swathes of people nor are they alive to the necessity of overhauling our flawed model of socio-economic development. The country is basically sitting on a social powder keg.

Profligate spending

The people’s growing impatience and ire at double standards and double talk are also being tested by the unending load of disconcerting revelations of profligate spending of public funds by government, the parastatal bodies and public corporations fuelled by cohorts of political appointees, political cronies of every kind occupying fat cat jobs and the huge fees paid to legal and diverse advisors, all at the expense of the public Exchequer. Last week government revealed in reply to a Parliamentary Question that ministerial missions during the 5-month period from July 2016 to last week have cost Rs 32 million to the Public Exchequer despite the rhetoric to stop the wasteful and continuous haemorrhage of public funds.

Such blithe profligacy with the Public Exchequer is a damning indictment of the public expenditure controls in place and good governance. It depicts a culture of enjoyment of the trappings of power rather than an ethos and commitment of altruistic service to the people and the nation. It is obviously a wasteful use of scarce resources which thwarts the socio-economic development efforts of the country for the common good. How much more could have been achieved by a more judicious and transparent use of scarce public funds? The upshot of such questionable practices is that investment into the major game changing projects such as the Metro Express or the Port petroleum hub would not have been possible without India’s generous grant of Rs 12.7 billion and ready financial support of $ 200 million (Rs 6.6 billion). Such sustained generosity by friendly countries is not a licence to those in power to blow up scarce public funds but to ensure it is necessarily matched by a more rigorous management of the Public Exchequer.

Those who understand the very special relationship of India with Mauritius which dates back from pre-independence times must know that it transcends all and that India will stand by us against thick and thin to safeguard our sovereign national interests at all times. Any apprehension or misgivings in this respect which reveal a lack of ken are therefore unwarranted as they are totally misguided

People power

Growing inequality and a questionable policy framework are among the root causes of the seething anti-establishment revolt of the people spreading over Europe and the US mirrored in the lengthening list of electoral upsets. Brexit, the election of Donald Trump, last week’s large defeat and resignation of Italy’s centre-left prime minister Matteo Renzi in the referendum he called on constitutional reforms or the victory of Independent candidate Alexander Van der Bellen as Austria’s president over the far right Freedom Party candidate are all pervasive signs of the people’s growing exasperation and anger at the existing political establishment and a model of socio-economic development based on economic liberalism, globalization, free trade, deepening inequalities and a deterioration of the standard of living of an increasing proportion of people.

Events of the past year have shown that people are on short fuse and are determined to establish a new socio-economic order which above all puts people, equality, inclusiveness, equal opportunities, respect of the environment, sustainability, transparency, accountability and national interests at the centre of policy making. Double standards and double talk are proscribed. It is becoming more and more evident that the people want to re-assert their paramount prerogatives to set the agenda for a new people centric socio-economic order.

Similarly, it is clear that the model of economic liberalism in place in Mauritius has failed the people. The growing clamour for a new socio-economic order which above all puts people, the bridging of inequalities, an environment friendly mode of development and inclusive prosperity at the centre of policy making is being echoed in our own country. The writing is boldly etched on the wall and the portent is clear. If there is no prompt change of tack, the people will, as is the case in so many places in the world, democratically rock the boat and upset the apple cart to set things right and on track to shape a better future for all.